PRCBroker: Analysis of Future Monetary Policy by Central Banks in Emerging Economies

This article summarizes the policy trends of central banks in emerging economies since mid-August. The author observes that the number of emerging-market central banks actively raising interest rates is increasing, marking a period requiring careful assessment of the evolving situation. Between August 16 and September 24, central banks in 16 countries (Indonesia, Sri Lanka, Iceland, South Korea, Chile, Poland, Malaysia, Peru, Pakistan, Russia, Hungary, Brazil, South Africa, the Philippines, Turkey, and Taiwan) held monetary policy meetings. Of these, nine central banks decided to raise interest rates—up from six during the period from July 1 to August 13. Among the nine, five central banks continued successive rate hikes, primarily located in South America and Eastern Europe: Peru, Chile, Russia, Hungary, and Brazil. Even in Asia—where the shift toward monetary tightening has been relatively slow—Sri Lanka and South Korea both opted for rate hikes in August. Financial markets broadly anticipate an acceleration in the pace of policy rate hikes among certain emerging economies. Russia, Chile, and South Korea have indicated that their central banks expect to raise additional rates next year. Moreover, on August 25, Lesetja Kganyago, Deputy Governor of the South African Reserve Bank, stated that “interest-rate normalization will proceed in stages,” while the South African central bank, at its September policy meeting, signaled expectations of rate increases during the October–December period this year. The primary driver behind these moves is that inflationary pressures have pushed headline inflation above the upper bounds of central banks’ target ranges. Should commodity prices continue rising, more emerging-market central banks are expected to be compelled to raise rates.

Updates on Monetary Policies and Market Data Across Multiple Countries: Global Currency and Capital Flows Draw Attention

Recently, numerous countries have released updated monetary policy developments and financial market data, covering interest-rate adjustments, capital flows, inflation expectations, and money-market performance—reflecting diverse strategies adopted by various economies to address domestic growth dynamics, shifting inflation trends, and international market volatility. In India, reports indicate that authorities are considering lowering tax burdens on foreign investors’ bond investments to attract greater overseas capital into the domestic bond market. Meanwhile, according to a Reuters survey, market sentiment toward the Indonesian rupiah and Indian rupee has turned increasingly bearish, whereas short positions on most other Asian currencies have declined compared with earlier levels—suggesting some adjustment in overall market sentiment. In Africa and the Middle East, Goldman Sachs forecasts that the South African Reserve Bank may raise interest rates twice this year—a projection diverging from earlier market expectations of rate cuts. Concurrently, the Central Bank of the Republic of Turkey has raised its medium-term inflation targets for the coming years, now forecasting end-2026 inflation at 24% and end-2027 inflation at 15%, both significantly higher than previously reported projections. In Latin America, the Central Reserve Bank of Peru announced it would hold its benchmark interest rate steady at 4.25%, opting to continue monitoring economic and inflation developments before making further adjustments.

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